This document summarizes Lok Sabha Unstarred Question No. 1412, addressed to the Minister of Fisheries, Animal Husbandry and Dairying on July 29, 2025, regarding milk processing margins in India. The question raised concerns about the price gap between what dairy farmers receive (approximately ₹32 per liter) and what consumers pay (₹60 or more), the monitoring of private dairy margins, the impact of processing margins and other factors on farmer income, the existence of a central mechanism for price/quality regulation, and potential violations of minimum procurement prices.
The Minister of State for Fisheries, Animal Husbandry and Dairying, Prof. S.P. Singh Baghel, responded that the Department of Animal Husbandry and Dairying (DAHD) regularly monitors the milk situation in consultation with state milk federations and stakeholders. According to their data for June 2025, the average procurement price paid to farmers was ₹47.70 per kg of milk (containing 6% fat and 9% solids-not-fat (SNF)), while the average sale price was ₹65.04 per liter. This indicates that approximately 73% of consumer prices is returned to farmers through procurement.
The DAHD does not regulate milk procurement or sale prices, as these are determined by cooperative and private dairies based on production costs, dairy commodity stocks (White Butter, Skimmed Milk Powder (SMP)), and market forces. Given this, the questions regarding the impact of inflated margins, tampered milkometers, and the lack of benefit from global milk powder price drops, as well as the need for a central mechanism for price regulation and oversight of private dairies, were deemed not to arise. The quality of milk is under the purview of the Food Safety and Standards Authority of India (FSSAI), Ministry of Health and Family Welfare.
Key Entities Referenced
MINISTRY OF FISHERIES, ANIMAL HUSBANDRY AND DAIRYING: The ministry responsible for fisheries, animal husbandry, and dairying in the Government of India.
LOK SABHA: The lower house of the Parliament of India, where the unstarred question was raised.
DR. AMOL RAMSING KOLHE: Member of Parliament who raised the unstarred question regarding milk processing margins.
PROF. S.P. SINGH BAGHEL: The Minister of State for Fisheries, Animal Husbandry and Dairying who provided the answer to the Lok Sabha question.
Department of Animal Husbandry Dairying (DAHD): A department within the Ministry of Fisheries, Animal Husbandry and Dairying, responsible for monitoring the milk situation in the country.
State Milk Federation Unions: Organizations at the state level that represent dairy farmers and are consulted by DAHD.
White Butter: A dairy commodity whose stock influences milk prices.
Skimmed Milk Powder (SMP): A dairy commodity whose stock influences milk prices.
Food Safety and Standards Authority of India (FSSAI): An authority under the Ministry of Health and Family Welfare responsible for food safety standards, including milk and milk products.
GOVERNMENT OF INDIA
MINISTRY OF FISHERIES, ANIMAL HUSBANDRY AND DAIRYING
DEPARTMENT OF ANIMAL HUSBANDRY AND DAIRYING
LOK SABHA
UNSTARRED QUESTION NO. 1412
TO BE ANSWERED ON 29th JULY 2025
PROCESSING MARGINS IN MILK
1412. DR. AMOL RAMSING KOLHE:
Will the Minister of FISHERIES, ANIMAL HUSBANDRY AND DAIRYING
मत्स्यपालन, पशुपालन और डेयरी मंत्री
be pleased to state:
(a) whether the Government is aware that dairy farmers in the country receive around 32 per
litre while consumers pay 60 or more, creating an 87.5% price gap;
(b) whether the Government is monitoring the margins of private dairies and intermediaries
between dairy farmers and consumers;
(c) whether the Government has assessed the impact of inflated processing margins, tampered
milkometers, and lack of benefit from global milk powder price drops on farmer incomes;
(d) whether there is a central mechanism exists to regulate the for price or quality regulation of
milk procurement and if not, the Government plans to strengthen oversight of private dairies;
(e) whether the Government is aware that violations of minimum procurement prices by private
unions and proposes policy guidelines to prevent such practices; and
(f) whether the Government has any proposals to establish a national milk pricing framework or
board, and issue enforcement guidelines on adulteration checks and pricing compliance?
ANSWER
THE MINISTER OF STATE FOR FISHERIES, ANIMAL HUSBANDRY AND DAIRYING
(PROF. S.P. SINGH BAGHEL)
(a) Department of Animal Husbandry & Dairying (DAHD), Government of India regularly
monitors the milk situation in the country in consultation with State milk
federations/stakeholders to review the milk situation the country. As per the Milk Situation
Report provided by the State Milk Federation/ Unions, the average procurement price of milk
paid to the farmers during the month of June 2025 was about Rs. 47.70 per kg of milk
containing 6% fat and 9% solids-not-fat (SNF) and the sale price for milk containing 6% fat
and 9% SNF is Rs 65.04 per litre, which implies that about 73% of consumer prices is directly
returned to the farmers in terms of procurement price.
(b) DAHD does not regulate procurement and sale prices of milk in the country Prices of milk
are decided by the cooperative and private dairies based on their cost of production, stocks
of dairy commodities (White Butter, Skimmed Milk Powder (SMP) etc.) and prevalent
market forces at domestic and international level.
(c) Does not arise in view of (a) and (b) above.
(d) to (f) Does not arise in view of (a) and (b) above with respect to milk procurement and milk
price. As regards the quality of milk, Food safety Standards for milk and milk products comes
under the preview of Food Safety and Standards Authority of India (FSSAI), Ministry of
Health and Family Welfare
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